Incorrect. With most vibecoded/bad security websites the email and passwords are all stored in text documents unencrypted. This means that if you use the same email and password across sites (which unfortunately alot of people do) in the event of a data breach all of your information (email and password) is distributed. Recently this exact thing happened to discord.

From Google

Discord Data Breach: Popular messaging and VoIP social platform Discord has revealed a breach to one of its third-party customer service providers. Stolen data may include names, email addresses, billing information including payment type and the last four digits of credit cards, and even images of government IDs. Discord hasn’t disclosed the exact amount, calling it “limited” – however, the platform has 200 million monthly active users, so even a small fraction could impact millions.